step-up basis for gift

Discussion in 'Tax' started by csj, Nov 14, 2003.

  1. csj

    csj Guest

    I gave my niece $8000 worth of Microsoft stock (at market
    value). I bought it originally for $4000. I understand I
    dont need to pay capital gains tax. But what about her cost
    basis?

    Thanks,
    Robert

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    csj, Nov 14, 2003
    #1
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  2. csj <> wrote:

    > I gave my niece $8000 worth of Microsoft stock (at market
    > value). I bought it originally for $4000. I understand I
    > dont need to pay capital gains tax. But what about her cost
    > basis?


    4000.

    When you give someone appreciated property, their cost basis
    and acquisition date is the same as yours.

    __
    Art Kamlet ArtKamlet @ AOL.com Columbus OH K2PZH

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    Arthur Kamlet, Nov 15, 2003
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  3. csj

    Don Priebe Guest

    > I gave my niece $8000 worth of Microsoft stock (at market
    > value). I bought it originally for $4000. I understand I
    > dont need to pay capital gains tax. But what about her cost
    > basis?


    It's the $4000 you paid. Gifts carry on the original basis
    and the original purchase date. Inheritances get the
    stepped up basis at time of death and are always long term.

    (There's a minor complication if the FMV at the time of the
    gift was less than the original basis. But that doesn't
    apply here.)

    --
    Don EA in Upstate NY

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    Don Priebe, Nov 15, 2003
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  4. csj

    Tempuser Guest

    csj wrote:

    > I gave my niece $8000 worth of Microsoft stock (at market
    > value). I bought it originally for $4000. I understand I
    > dont need to pay capital gains tax. But what about her cost
    > basis?


    As the FMV on the date of the gift exceeded the cost basis
    in the hands of the donor, the donor's cost basis of $4000
    transfers to the donee.

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    Tempuser, Nov 15, 2003
    #4
  5. > I gave my niece $8000 worth of Microsoft stock (at market
    > value). I bought it originally for $4000. I understand I
    > dont need to pay capital gains tax. But what about her cost
    > basis?


    Her cost basis is your cost basis.

    Helen, EA in PA
    Member of The Tax Gang
    President, PA Society of Enrolled Agents
    Campaigning for NAEA Board of Directors - Looking for YOUR vote

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    Helen P. OPlanick EA, Nov 15, 2003
    #5
  6. "csj" <> wrote:

    > I gave my niece $8000 worth of Microsoft stock (at market
    > value). I bought it originally for $4000. I understand I
    > dont need to pay capital gains tax. But what about her cost
    > basis?


    Well, if you were alive when you gave it to her, her cost
    basis is the same as yours.

    Stu

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    Stuart O. Bronstein, Nov 15, 2003
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  7. csj

    Paul Guest

    "csj" <> wrote

    > I gave my niece $8000 worth of Microsoft stock (at market
    > value). I bought it originally for $4000. I understand I
    > dont need to pay capital gains tax. But what about her cost
    > basis?


    Your cost basis is given to her with the stock, so her cost
    basis is $4000.

    --
    Paul A. Thomas, CPA
    taxman at negia.net

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    Paul, Nov 15, 2003
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  8. csj

    MAT1040X Guest

    > I gave my niece $8000 worth of Microsoft stock (at market
    > value). I bought it originally for $4000. I understand I
    > dont need to pay capital gains tax. But what about her cost
    > basis?


    Your niece "walks in your shoes" for purposes of cost and
    holding period. You should give her your original purchase
    information so that she can calculate her gain when she
    sells it.

    Mary Ann Thomas, EA in AZ

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    MAT1040X, Nov 17, 2003
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